Suits Challenge Liens to Fund Abalone Cove Landslide Work

Rancho Palos Verdes property owners have filed two lawsuits against the county claiming that it has illegally imposed large liens on them to pay for public works projects in the Abalone Cove landslide area.

The suits, filed separately in Los Angeles Superior Court by 14 property owners and by Arizona developer James Monaghan, allege that the county acted improperly when it created an assessment district in the area and imposed the liens to guarantee $10 million in bonds.

The county’s action was taken as part of a 3-year-old legal settlement entered into with another group of homeowners who had alleged in their own suit that excessive water runoff in the area caused the landslide to develop.

“It’s a redress of the basic inequity, that is what we are seeking,” said Jack Downhill, an Abalone Cove resident whose lien has been calculated at about $92,000.

“The county is settling a lawsuit against it and reaching out and placing a lien on my client’s property,” Monaghan attorney Skip Miller said. “We don’t think that is a constitutional way to create an assessment district.”

Under the approach chosen by the county, it will issue the bonds and turn the capital over to the city for landslide abatement work. Liens will be placed on the properties there, and money to pay back the bonds’ principal and interest is expected to become available as property values in the Abalone Cove area increase.

The county’s agreement with the city calls for the county to issue the bonds and buy them itself. The county will then defer payments on the principal and interest for 10 years. After that, the bonds will be paid off over 20 years through increased property taxes generated as properties in the area are sold.

City officials maintain that Abalone Cove property owners will benefit greatly from the assessment district. Once the landslide abatement work is completed, property values will increase, they argue.

In the face of the lawsuit, Hinchliffe said the assessment district will not cost property owners anything. “The matter of growth that needs to take place really is well below what has been experienced, and it is a neat way of paying for this thing,” Hinchliffe said.

But opponents of the plan have argued that there is no guarantee that property values will increase enough to pay off the bonds, and the property owners who filed suit are afraid that they will eventually have to pay off the liens themselves.

“Unless they have a rabbit they are going to pull out of a hat, there is no way they are going to pay off these bonds,” said Enrica Stuart, a plaintiff in the residents’ lawsuit.

Opponents have also said that placing liens on their land will make it difficult for them to sell their properties.

Monaghan, whose company, Rancho Palos Verdes Resorts Inc., owns 316 vacant acres in the landslide area, faces a $2.8-million lien. Liens are calculated based on the size of a property and the structures on it.

In addition to the county, the residents’ lawsuit names as defendants the city of Rancho Palos Verdes and its redevelopment agency. The city has staunchly supported the creation of the assessment district as a way to raise money to halt the slide, which has stabilized as a result of various abatement efforts.

Deputy County Counsel Frank Scott said Friday that he had not yet reviewed the lawsuits, although he maintained that the county had abided by state law, which allows local governments to form assessment districts and impose liens.

Scott added that even though the idea to create the district grew out of the lawsuit filed by the first group of homeowners and was “somewhat of a novel settlement agreement,” separate public hearings were held on the plan by the county.

“It was not a rubber-stamp sort of thing” that was dictated by the settlement, he said.

Rancho Palos Verdes Mayor Douglas Hinchliffe said he believes that Monaghan filed the lawsuit because he is angry with city officials.

At a November meeting with several city officials, Monaghan implied that he would file suit unless the city guaranteed that he could build a golf course on his Abalone Cove property, Hinchliffe said.

The city has imposed a building moratorium in the area because of the landslide. Monaghan has applied to build a hotel resort on his land at the former Marineland site, and a golf course at nearby Abalone Cove would make the resort more attractive.

Monaghan was out of the country on business and could not be reached for comment.

The lawsuits were filed Thursday, a month after the Board of Supervisors approved the plan.